Chuck Rizzo Jr., CEO of Rizzo Environmental Services Inc., said the waste hauler plans this week to end its option agreement on 316 acres where it had proposed a landfill in Lenox Township.

Sterling Heights-based Rizzo Environmental Services Inc. has seen so much growth recently in municipal and commercial waste collection contracts that it no longer sees a need to diversify into landfills.

The turning points: Waste collected by Rizzo under a new trash hauling and curbside recycling contract award from the city of Detroit apparently won't be leaving the city, and St. Clair County may become a disposal option for some of its Macomb County suburban customers.

Company President and CEO Chuck Rizzo Jr. said the family-owned waste hauler plans this week to terminate its option agreement on 316 acres of land where it had proposed the Clinton Valley Farms landfill in Lenox Township. It will also table its application for Macomb County officials to allow the landfill in favor of a request to export more trash outside the county, he said.

Rizzo said a number of market conditions for waste collection in Southeast Michigan have changed since the company first entered into the Lenox option, about a year ago.

One is the likelihood that Rizzo and Florida-based Advanced Disposal Inc. will be disposing all of Detroit's trash at the Detroit Renewable Energy LLC waste-to-energy plant in the city (known as the Detroit incinerator) once the two new Detroit contractors take over solid waste collection for the city on May 1. That originally wasn't expected to happen, when Detroit first shopped a proposal to privatize waste collection last year.

Another is that neighboring St. Clair County may open its borders to accept Macomb waste soon to its own Smiths Creek Landfill, in a deal that is expected to create more market competition for the Waste Management Inc.-owned Pine Tree Acres landfill in Lenox. Pine Tree is currently Macomb's only open landfill.

"We were concerned about a monopoly (by Waste Management), and amending our request might create the same result," Rizzo said. "This change now helps create the market competition effect of having another landfill in the county, but without the cost of adding another landfill."

Jeffrey Bohm, chairman of the St. Clair County Board of Commissioners, confirmed that the county has reviewed landfill operations with consultants and should "very soon" consider a proposal to amend its solid waste plan and allow waste imports from Macomb and Lapeer counties.

Traditionally a closed county, St. Clair has seen collection at its only active landfill dwindle from about 370,000 tons in 2003 to about 170,000 tons today, largely due to plummeting commercial waste contributions among its local businesses. That brings Smiths Creek to about a break-even operation, he said, and the county has been looking at waste imports to bolster profitability.

"The volumes are way down, and we are looking for a way to get our waste streams stabilized," Bohm said. "Sometimes you have communities that don't address that issue until it's become a problem. We're trying instead to be very proactive."

Rizzo said his company, co-founded in 1998 with his father, Charles Rizzo Sr., maintains a business mix of about 60 percent municipal contracts and 40 percent commercial waste collection contract with large manufacturers and other companies.

Its parent company, Rizzo Group, is co-owned by father and son along with CEO Michael Ferrantino Jr. of EQ – The Environmental Quality Co. in Wayne; New York City-based private equity firm Kinderhook Industries; and Habib Mamou, president of V&M Corp., doing business as Royal Oak Recycling.

Rizzo Environmental has grown steadily through a mix of new residential contracts and business acquisitions, and the company claims it has never lost a municipal contract since Hamtramck became its first customer in 2001.

When Kinderhook acquired its stake in Rizzo Group in 2012, revenue was about $23 million, Chuck Rizzo said. This year, it should exceed $70 million, even before it begins servicing two out of four geographic zones of Detroit.

Rizzo Environmental in November acquired Royal Oak Recycling (Chuck Rizzo estimates the target company revenue was almost $20 million) and in July it won the residential hauling contracts for Eastpointe, Roseville and St. Clair Shores away from Waste Management of Michigan, a subsidiary of Houston-based Waste Management.

The company also picked up contracts for more than a half dozen Oakland County communities and the management of a Warren transfer station out of the 2012 bankruptcy of Flint-based Richfield Equities LLC, which converted to a Chapter 7 liquidation last February.

Chuck Rizzo and Charles Rizzo Sr. told Crain's the company won its first municipal contract for Hamtramck in 2001 and has since grown to provide services to 32 local communities in Wayne, Oakland and Macomb counties.

Adding the Detroit contract is expected to require Rizzo to buy about 40 new vehicles and add 55-60 new jobs, and could add $10.5 million to $11 million in additional yearly revenue, meaning 2014 revenue could approach $80 million depending on when Detroit service begins.

Contract terms are still being finalized, although Chuck Rizzo said the company could start as early as February.

The company also claims a better than an 80 percent success rate on recent municipal bidding against its competitors. Chuck Rizzo credits that track record in part to being a local company without the added overhead costs of Waste Management, Arizona-based Republic Services Inc. and other competitors that also maintain landfills, recyclable materials recovery centers and other nonhauling operations.

The company also has sometimes aggressively pursued new business, even submitting unsolicited bids in the past for St. Clair Shores and Harrison Township. Last fall, it submitted a similar bid to Rochester Hills, and even tried a local politics tactic: contacting a citizens' watchdog group that organized robocalls to residents after that company renewed a Republic Services contract without competitive bidding.

Because of the corporate growth, Rizzo recently acquired 6 acres of land adjacent to its 40,000-square-foot garage and office building in Sterling Heights, where it has been based since 2005. Chuck Rizzo said the company hopes to open a new services center in Pontiac by June if it can clear some Oakland County regulatory approvals in the next few months, but it isn't short on vehicle fleet space.

"There's plenty of capacity here" at Sterling Heights, he said, adding that even with Detroit, the location won't be more than 80 percent full. "And at this location, we're not near very many residential neighborhoods to have concerns about noise or the early morning starts."

Rizzo Environmental also has a bid pending to add Southgate to its waste hauling contracts, and plans upcoming bids on Harrison Township and Washington Township as well as possible acquisitions this year, Rizzo said.

Tom Horton, government affairs manager for the Michigan, Indiana and Ohio region of Waste Management, said the new Rizzo and Advanced Disposal contracts simply prove the Detroit area "has always been a robust, competitive marketplace" for waste haulers, and that competition should continue.

He also said a new $15 million plant that converts landfill gas from the Pine Tree Acres landfill into electricity has helped establish Waste Management as the largest producer of landfill energy in the Midwest.

That plant, completed in 2012, expanded the landfill's power output capacity from 8.8 megawatts to 21.6 megawatts, enough to power about 17,000 homes. Horton also disputes Rizzo's contention that Pine Tree Acres has a monopoly on Macomb waste disposal due to its location and limitations on waste exports.

"These are guidelines, not restrictions, on moving waste in the county's (solid waste management) plan, and these (Rizzo's) allegations that restrictions exist are simply without evidence," he said.

The company handles recycling and hauls paper and cardboard waste for reuse for General Motors Co. at the Renaissance Center headquarters, under a zero-landfill conversion plan the automaker completed at its headquarters complex in December. But Royal Oak Recycling, now a Rizzo company, also bales and ships paper from the RenCen to be resold as material and cereal box and tissue paper.

Both Rizzo and Advanced Disposal, the company awarded the other half of the Detroit contract, are expected to send waste to the Detroit incinerator. The city is being divided into east and west collection zones as part of the contract.

Detroit Renewable Power President John O'Sullivan confirmed the two new waste contractors recently informed his company they will send all Detroit waste to the plant, either directly or by way of a Southfield transfer station.

"It's my understanding that's the city's choice, though we haven't had much direct communication from the city recently," O'Sullivan said. "That may change soon, though, since a new mayoral administration is in and we expect to see some new activity now on its (Detroit's) operations side."